MORE than £9.6million went into the tills at Beales stores in barely a month after administrators took over the business and launched clearance sales.

The extra footfall generated a £5m surplus between January 20 and February 25 but no viable bidders came forward to take over the business, a report says.

The Bournemouth-based department store chain ceased trading last week after the coronavirus crisis brought an early end to the sales.

A report by joint administrators from KPMG says Beales faced an “acute liquidity crisis” when they were called in on January 20.

It says attempts had been made to restructure the business after chief executive Tony Brown took control in a management buyout in 2018, but it faced “an extremely difficult retail environment”.

The report, by joint administrators William Wright and Stephen Absolom, adds: “With the impact of high rents and rates exacerbated by disappointing trading over the most recent Christmas period, and extensive discussions around additional investment or a solvent solution proving unsuccessful, the company was facing an acute liquidity crisis.”

Beales owed around £12.6million in loans and had a multi-million pound pension deficit, the report says.

The £12.6m consisted of a term loan and a revolving credit facility to Wells Fargo. KPMG is looking into the extent of the pension deficit but as of October 2016 it stood at £7.85m.

The report says: “It is currently anticipated that the secured creditors will suffer a significant shortfall in respect of the funding provided to the company and the wider group.”

It is likely that preferential creditors will be paid in full. They include employees who are owed wages arrears up to £800, holiday pay and some pension benefits, totalling £227,000.

Unsecured creditors are owed £17.6m, including £4.6m owed by JE Beale to parent company Beale Ltd. They are likely to be paid a dividend.

To keep Beales trading in administration, KPMG had to pay £92,664 in “ransom payments” to some suppliers, the report said.

The increased footfall to Beales’ 23 stores, including branches in Bournemouth and Poole, led to KPMG paying £6,300 for agency staff to add to the store teams.

The report was submitted on March 16, before the coronavirus brought an end to trading. It said the most likely “exit route” for the business was dissolution.

The cost of KPMG’s time amounted to £965,158, based on 2,509 hours charged at £385 an hour as of February 21.

At the time of the administrators’ appointment, Beales had 1,030 staff, of whom 99 worked at the group’s head office in Bournemouth.

As of March 31, 2019, Beales had a turnover of £48.3m but made a pre-tax loss of £2.2m, the administrators said.